Oregon port lands rail deal with Union Pacific

Port officials in Coos Bay,
Ore., expect to sign a deal with Union Pacific as soon as next week to take
control of the rail line between the North Spit and Coquille, The World
reports. Port commissioners approved an agreement that Executive Director
Jeffery Bishop has been working on for nearly a year, said spokesman Martin
Callery. The deal means rail service can reopen as soon as next year, all the
way from Eugene to Coquille -- an important step for southern Coos County shippers.

The deal covers the rail
line that passes through North Bend and Coos Bay along U.S. Highway 101.

The Omaha-based rail
company will donate all its Coos County assets to the port, including property
and infrastructure. In exchange, the port will release UP from its obligation
to tear down the Coos Bay railroad bridge if the line someday is abandoned.
That arrangement was put in place when the port bought the bridge from UP for
$1 about 10 years ago, so it could use public funds to make repairs. The U.S.
Coast Guard often requires railroad owners to remove bridges from abandoned
rail lines when they cross a shipping channel.

The port will also pay a
yet-to-be determined amount for a parcel of land in North Bend on which UP has
a billboard. UP had been reluctant to give up the property because it generates
revenue. But the port wouldn't take no for an answer, Callery said.

"We want to own
everything free and clear so there is nothing hanging out there that you have
to get somebody else's permission to do something," Callery said.

The port is shooting to
close the deal by the end of June and already has consulting engineers
preparing cost estimates for repairs to the 22-mile track.

Various legal details
remain to be resolved before the port takes over the track. Though UP owns the
track, the line is leased to the Central Oregon & Pacific Railroad, which
formerly ran rail service between Eugene and the coast. CORP has a
responsibility to return the line in good operating condition, but what that
means is up to interpretation, said Callery.

"We will likely have
to negotiate something with CORP," he said.

CORP sold the Coos Bay Rail
Link to the port last year for a little more than $16 million. That gave the
port control of track from Eugene to the North Spit. This week's deal completes
the route to Coquille.

The port hopes to have the
line from Eugene to the North Spit reopened by the end of winter 2011. A
contractor is repairing tunnels along that stretch of track, and the port is
seeking money for additional repairs.